{"id":9397,"date":"2024-06-28T15:02:54","date_gmt":"2024-06-28T15:02:54","guid":{"rendered":"https:\/\/cobiaholdings.com\/?p=9397"},"modified":"2024-06-28T15:02:58","modified_gmt":"2024-06-28T15:02:58","slug":"are-we-buy-houses-for-cash-or-fast-scams","status":"publish","type":"post","link":"https:\/\/cobiaholdings.com\/are-we-buy-houses-for-cash-or-fast-scams\/","title":{"rendered":"Are “We Buy Houses” (For Cash or Fast) Scams?"},"content":{"rendered":"\n

I’m sure you’ve seen the signs on the side of the road – “we buy houses” with a phone number. One thing that has been coming up lately is “are we buy houses for cash” scams? Honestly, I never understood the naming of such companies. They don’t really make sense… <\/p>\n\n\n\n

Are “We Buy Houses” (For Cash or Fast) Scams? <\/strong><\/h2>\n\n\n\n

The short answer is NO they’re not scams, but the wholesale real estate industry (what our industry is actually called) does require some explanation and we encourage all of our potential clients to read through this thorough blog post about the industry, how it works, so they can make the right decision and answer for themselves – Are “We Buy Houses” (For Cash or Fast) Scams?<\/em><\/strong> <\/p>\n\n\n\n

Let’s take a step back and talk about the predicament we find a lot of our clients in. <\/p>\n\n\n\n

\"Are<\/figure>\n\n\n\n

Are You Trying to (Quickly) Sell Your Home, Preferably for Cash? <\/h2>\n\n\n\n

The clients we’ve worked with throughout the years are often in tough situations. In the last couple months alone, we’ve dealt with clients who’s loved ones have passed, are dealing with family drug issues, hoarders, animal issues (too many animals), flooding, and much more. <\/p>\n\n\n\n

The one common denominator tends to be the persons we’re dealing with are often in dire-straits financially, OR some kind of time-based emergency is happening where they MUST get rid of their homes asap. Those in Estero<\/a> or Fort Myers looking to sell their home quickly often contact us. <\/p>\n\n\n\n

Now Let’s Talk About Housing, Particularly in Southwest Florida<\/strong><\/p>\n\n\n\n

The wholesale market is unique, as it’s basically a free-for-all, particularly in Florida. Learn more about it from this great guide on the wholesale industry<\/a> by RocketMortgage. <\/p>\n\n\n\n

Not ALL markets are this way, although most are – I’ll get back to this in a moment. These days, a combination of cost of materials, expensive trades prices, and simple lack of skill set (who do you know that can tile a bathroom for instance?) leads to some weird market dynamics that weren’t in place 50 years ago. <\/p>\n\n\n\n

On the open market buyers overwhelmingly demand turn-key homes. What does this mean and what is a “turn-key home?” Well it’s simple, absolutely everything is up-to-date, and won’t require maintenance, fixing, etc. for some time. In fact, deals for otherwise great homes fall apart all the time because homes have roofs that are just a little bit too old (5+ years) or because an existing owner refuses to fix something small. New buyers are picky and lazy. They would rather bundle in the cost of having things up to date and not needing repairs and maintenance, then get a discount, but have to update their homes themselves. <\/p>\n\n\n\n

So, in Southwest Florida we see that virtually ALL homes that are sold are turn-key (up-to-date, modern amenities, refreshed kitchens, bathrooms, and much more). <\/p>\n\n\n\n

But the question becomes… if one HAS to sell their home QUICKLY – but they don’t have the time or money to make these updates (or the emergency is even more dire) what can you do? Well we’ll get back to that here shortly, but that’s generally where we step in. <\/p>\n\n\n\n

Continuing with the housing market there’s some additional information to take note: <\/p>\n\n\n\n

Selling a Home Takes Time & Money <\/strong>– To get a home up to sales-ready virtually ALL homes require an investment of around 5% to get ready – the homes & homeowners we’re often working with have FAR greater requirements. <\/p>\n\n\n\n

Agents are Expensive<\/strong> – If you’re selling your home for $500,000 the fees are generally around 10% of the total sales price or $50,000! <\/p>\n\n\n\n

Selling Takes a LONG Time These Days <\/strong>– We’re seeing average sales times of a year or more. <\/p>\n\n\n\n

98% of FSBO listings never sell<\/strong> – when owners go off on their own to try to sell their home (even in cases where major upgrades aren’t needed) THEY STILL don’t sell. There’s real value in working with agents or people experienced in the real estate sector. <\/p>\n\n\n\n

Homes That Aren’t Priced Correctly Don’t Sell <\/strong>– Today INVENTORY IS UP OVER 70%, but homes simply aren’t selling. If priced incorrectly (as virtually all homes in Southwest Florida are right now) they simply won’t sell. We’re seeing insane numbers when it comes to expired listings, time on market, and total inventory. But, because of the unique nature of the SWFL market (many retirees whose cost to maintain their homes down here is relatively small) they’re “greedy” opting to keep their pricing high, but not selling their property. This is a very unique time in Real Estate and one many agents, brokerages, and individuals are having a tough time navigating. For more details check out our recent piece on the 2024 real estate market<\/a>. <\/p>\n\n\n\n

So with all of this in mind what is a person or family in an emergency to do? <\/p>\n\n\n\n

Cash Home Buying Companies Like Cobia Are Here to Help<\/h2>\n\n\n\n

Again, if one HAS to sell their home QUICKLY – but they don’t have the time or money to make the above updates – or something else precludes this from happening (health, circumstance, out of area, etc.) that’s where a company like Cobia steps in. <\/p>\n\n\n\n

We do fast, cash offers, guaranteed. Closing is 30 days or less NOT a year or more. You don’t have multiple people traipsing through your house, you DON’T have to worry about a bank approving a loan. You get a guaranteed amount, in cash, to allow you to move on with your life and do what you need to do. <\/p>\n\n\n\n

Now some things to keep in mind… <\/em><\/strong><\/p>\n\n\n\n

    \n
  • Because we’re taking on a tremendous amount of risk, the offer will be less than the open market. <\/li>\n\n\n\n
  • Even seasoned homeowners often have NO IDEA the value of their home (I’ll have a story about this down below) – just like company owners, they OVER VALUE everything. Just because you bought that fancy fridge for $5k, doesn’t mean it adds $5k to the value of your home. <\/li>\n\n\n\n
  • We often close on your home personally, but will occasionally sell it to an investor that’s looking to fix the property up and flip it. <\/li>\n\n\n\n
  • If we end up flipping your home, we often won’t see a return\/profit for over 90 days, this is a LONG time to have money locked up in an investment of this nature – the money costs alone are pretty high. <\/li>\n<\/ul>\n\n\n\n

    Now before I try to “sell” you on using our company I want to point out the following…<\/strong><\/p>\n\n\n\n

      \n
    • We do make income on virtually every deal (yes deals that involve people who are struggling)<\/li>\n\n\n\n
    • Profit is a bit trickier (particularly in this industry and at this point in time in the real estate market)<\/li>\n\n\n\n
    • We have MANY tough conversations with sellers and sometimes it can be rather difficult for sellers, not only because they don’t want to leave their homes, but because of whatever additional circumstances they may be dealing with.<\/li>\n\n\n\n
    • We are 100% Local, All money stays local – we’re not a firm advertising in the region, pretending to be a kind resource, we truly love this area, love our neighbors and want to keep funds in this business in this region as much as possible<\/li>\n\n\n\n
    • Literally all of our team was born and raised in Southwest Florida meaning we have the best resources, intel, etc. and can offer the greatest amounts due to our network and our efficiency. <\/li>\n<\/ul>\n\n\n\n

      I say that to say this, it was our goal in starting this firm to truly help Southwest Florida residents going through tough circumstances using the tools we have (expertise in Real Estate, marketing, repair and construction expertise). With that in mind it’s VERY important for anyone to consider going with a company like Cobia to VET the company making them an offer. We’ve come up with the following <\/p>\n\n\n\n

      Seasoned Homeowners Have No Idea How to Value Their Home<\/h2>\n\n\n\n

      So a quick funny story. A couple months ago we got a call from a woman that was frantic about selling her home. One of our team members quickly drove to her house that afternoon to meet her. Unfortunately her schedule was conflicted so our agent was stuck waiting at the property for over 2 hours before she arrived (she kept saying she would be there shortly). While there the owners’ boyfriend confronted our team and initially got violent (it’s all in a days work lol). <\/p>\n\n\n\n

      Being calm and cool we were able to calm the homeowners’ boyfriend down. After a while the homeowner showed up and after a review of the property and a discussion of what was going on an offer was submitted. The offer was for $300,000. <\/p>\n\n\n\n

      The homeowner was aghast… my neighbor’s home sold last year for $550,000. There’s no way I’m taking that. Unfortunately that day we weren’t able to make things work. However, after getting back to the office that evening and doing a deeper dive into everything what was learned was: <\/p>\n\n\n\n

        \n
      • The neighbors property was larger (both in land and in square footage)<\/li>\n\n\n\n
      • Flood insurance was greatly affected just by one small street over (the neighbor wasn’t in the flood plane)<\/li>\n\n\n\n
      • No pool – our potential client didn’t have a pool at her home (which is worth $100,000 alone)<\/li>\n\n\n\n
      • $100k+ in upgrades – the neighbors “identical home” had roughly $100,000 in valuable upgrades<\/li>\n<\/ul>\n\n\n\n

        In the end we actually were offering too much for the home given what we would need to do to get it to sell. Thankfully we lost this deal. <\/p>\n\n\n\n

        Dangers to Look Out for With a We Buy Houses Company<\/h2>\n\n\n\n

        I’m going to wrap up this post with a few specific things we’d like you to look out for if you’re considering talking with a wholesale company…<\/p>\n\n\n\n

        Make sure they’re local –<\/strong> there are MANY unscrupulous businesses operating in Lee & Collier County, that aren’t in the area in ANY WAY SHAPE OR FORM – in fact they pay local people to essentially come to your house to assess and sign contracts, but they are just paid a small fee or a commission – they’re not actually doing business in the area. These business operate in Miami or other areas (states) and your dollars are being SAPPED from the area). <\/p>\n\n\n\n

        Make sure they’re a small business and not a giant conglomerate. <\/strong><\/p>\n\n\n\n

        You CAN probably get better pricing<\/strong> – if you go with a smaller company like Cobia, one that’s a small, LOCAL business. We know the market, and therefore are much better at assessing risk. We don’t need MASSIVE margins to make our business model work. <\/p>\n\n\n\n

        Ask Tons of Questions<\/strong> – the more the better. Really vet the company. <\/p>\n\n\n\n

        One quick example of this. We talked to a client recently during the course of a home purchase for one of our founders. He bought a condo that was recently put on the market in Fort Myers. It was purchased for a great price at around $300,000 (many others are going for $350k+) so someone was pricing it appropriately for the region and the market. <\/p>\n\n\n\n

        Turns out it was a wholesale deal where a company from out of the area purchased it for $150,000 the DAY before. They literally signed the agreement, put it on the open market, and within ONE BUSINESS DAY made $150,000. They were a firm based in Miami. Disgusting. A quality wholesaler would have purchased it for a reasonable price $250k, as it was in pristine condition. The owner was effectively robbed of $100,000 in equity, and the entire $150,000 in profit is now going to benefit a totally different region. <\/p>\n","protected":false},"excerpt":{"rendered":"

        I’m sure you’ve seen the signs on the side of the road – “we buy houses” with a phone number. One thing that has been coming up lately is “are we buy houses for cash” scams? Honestly, I never understood the naming of such companies. They don’t really make sense… Are “We Buy Houses” (For […]<\/p>\n","protected":false},"author":5,"featured_media":9399,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[],"class_list":["post-9397","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-sales"],"_links":{"self":[{"href":"https:\/\/cobiaholdings.com\/wp-json\/wp\/v2\/posts\/9397"}],"collection":[{"href":"https:\/\/cobiaholdings.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cobiaholdings.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cobiaholdings.com\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/cobiaholdings.com\/wp-json\/wp\/v2\/comments?post=9397"}],"version-history":[{"count":1,"href":"https:\/\/cobiaholdings.com\/wp-json\/wp\/v2\/posts\/9397\/revisions"}],"predecessor-version":[{"id":9400,"href":"https:\/\/cobiaholdings.com\/wp-json\/wp\/v2\/posts\/9397\/revisions\/9400"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cobiaholdings.com\/wp-json\/wp\/v2\/media\/9399"}],"wp:attachment":[{"href":"https:\/\/cobiaholdings.com\/wp-json\/wp\/v2\/media?parent=9397"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cobiaholdings.com\/wp-json\/wp\/v2\/categories?post=9397"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cobiaholdings.com\/wp-json\/wp\/v2\/tags?post=9397"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}